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Media Announcement 2013/04/26

Sorry, mods, I lost track of where the active thread is. Please feel free to move this to wherever. Sorry for the inconvenience.

Rough live notes...

(Service) Media Announcement

several things, 4 in particular
1 - Loaners, full loaded cars, all the latest options, probably better than the car you are driving. will be immediately available for purchase a discounted rate ($1/mi I think he said). (something about) an option to have the Roadster as your loaner if available.
2 - Valet service, car seamlessly switched out at your home/work ... wherever you are. Same at return of your car. Invisible / better than invisible service.
3 - Annual service contract optional. No oil, fewer brake pad replacements. Annual checkup entirely optional. Warranty is still valid if car never brought in.
4 - Battery. Expensive and important part. Will protect itself. If something goes wrong, it's Tesla fault not the customers. Complete piece of mind even if you never read or followed instructions in the manual.

Questions

1. From customers, is service a weak spot? Or what is driving the news today.
Service is ok but not great. Needs to be great. What's the service and warranty program you wish you could have from any carmaker? That's the perspective we were evaluating from.

2. More detail on unconditional warranty. Replace no questions ask? No cost to user? Transferable when owner sells the car.
Wouldn't apply for example if you take a blow torch to the battery pack, blow it up, target practice. Covered unless you intentionally try to destroy it. Complete piece of mind for the owner (is the goal). Shouldn't have to worry about whether you read the manual. Any product that needs a manual to work is broken. It does transfer to whoever buys it.

2b. Will this allow future proofing? If you build a better can a new owner get the better battery under the warranty.
We will replace with something as good or better. (He didn't fully answer the question.)

3. How many Model S be built for the service loaner fleet? And will that be incremental.
Over time, a lot. Initial batch about 100. Incremental to the 20k per yet (not subtractive). Probably build several hundred for worldwide consumption. It'll be whatever the number is needed to ensure that customers have a good experience.

3b. How many will be placed at each retail location?
Service locations. Vary according to customers serviced out of that location. Anywhere from 2 to 10.

4. Approximately how long will vehicles be in the service fleet before rotating out. Miles? Time?
Want to make sure that the service loaners are newish. Don't want an aging fleet of used cars. Adjust pricing so that service loaner fleet is 2-3 months old.

6. If the customer likes the loaner better than their own car, how would the pricing work?
They would pay the price differential. Adjusted by age/mileage relative to the car they've got.

7. Any battery studies or analysis factor into the announcement today or the personal backing a few weeks ago re: trade-in?
Overarching principle is giving people peace of mind. Existing or new customers. Wanting them to have happiest possible transport experience.

7b. It wasn't based on recent additional analysis of the battery (internally)?
We have yet to have a single battery pack dies at the module level. Contactors and chips have broken. But literally zero battery pack failures at module or cell level.

7c. Any accordianing (sp?) going on with demand? (Something about demand at the low end.)
I'm going through piece by piece. We want to make each of the pieces of as good as we can. The transport experience... I've told the service division is that there job is never to make a profit. (He didn't like his phrasing after stating it, but you get the gist.) The service division of Tesla is under instruction to operate the business at the zero profit point. Don't service the cars and try to make money off people. "Maximize service not minimize."

8. What problems drove the announcement?
Not driven by a tactical (tactile?) issue with the cars.

8b. Not a lot of complaints about service from owners?
Varies... parts of the country. We didn't quite anticipate the right mixture of product in every market. Late in permitting in L.A. for example. Some examples ... not good. Unrelated to this announcement. This announcement is about stepping back and evaluating the best way to do service and warranty.

9. If I were a Model S and I get this loaner I like better. How you prorate? Mileage and age? (Same as question 6.)
(I missed the answer mostly because I was bored with the question. Nothing surprising or interesting about the answer. Elon was fine, but the question didn't do much for me.)

10. To what extent was this problem to allay broader EV concerns about range anxiety, etc.? Do you expect the service program to encourage and spur sales going forward?
This isn't attempting to address the range issue. Supercharger announcement in a week or two. Attempted to address ... what happens if my battery dies. What if I make a mistake ... the manual. Even if you do something wrong, unless you intentionally try to destroy the battery pack you'll be covered.

Mandatory service fee was a mistake, and is being corrected.

Future sales... I think this is very important for long term sales.

11. I would assume these are going to be policies you are going to be carrying forward to the Model X and products to come. Can you talk about that? You've suggested here future upgraded batteries. Will you at some point come up with a program where somebody wants to buy an upgraded battery?
There's a good chance something like what you're saying could occur. Our interval period for significant technology step changes is about 4-5 years.

11b. It would be reasonable for us to say you are considering within the lifetime of a (current) Model S?
Yes, that's a pretty good likelihood. I love upgrades. Today isn't about that but it would be a logical thing in the future.

11c. (Repeat of question about Model X, etc.)
Third generation I'm hopefully we'll be able to do all these things, but may have to unbundle some of thes things to make the car more affordable. Aspirationally we'd like to include all these things. Will be a certainty with the Model X.

11d. ... AWD has become a requirement in some key sections of the market. Is AWD something you're considering?
We've said the Model X will have a revolutionary AWD with dual motors, dynamically shifting torque at the millisecond level.

11e. (Shrugging off the Model X...) Is AWD something you'd foresee as more broadly across your lineup?
I don't want to say anything definitive but I certainly share your sentiment.

Great service improvement. This brought two obvious questions to mind:

1. Are software updates to the Model S tied to having a service agreements?
2. Replacing batteries is awesome. The range of batteries decrease over time. How will you prevent people from "intentionally" bricking their car by "accidentally" failing to charge it just to get a new battery with more range?

Great service improvement. This brought two obvious questions to mind:

1. Are software updates to the Model S tied to having a service agreements?
2. Replacing batteries is awesome. The range of batteries decrease over time. How will you prevent people from "intentionally" bricking their car by "accidentally" failing to charge it just to get a new battery with more range?

Click to expand...

As for #2, I think they are confident that:

1. They have engineered sufficient safeguards to protect the battery against most kinds of abuse.
2. Most people aren't complete jerks.

Also wondering about Ranger vs "valet" service... is there a radius from each service center covered by the valet, and for anything beyond that range one is on their own if they didn't purchase the Ranger option?

If we prepaid for the previously "mandatory" service, can we get a refund?

Click to expand...

I would imagine you'll have an answer within days if not hours. You want the word from Tesla of course, but I really think they will allow cancellation. Elon said on the call that requiring service contract for warranty to be valid was a mistake. He talked repeatedly about seeing the service value proposition from the customer's perspective.

I would imagine you'll have an answer within days if not hours. You want the word from Tesla of course, but I really think they will allow cancellation. Elon said on the call that requiring service contract for warranty to be valid was a mistake. He talked repeatedly about seeing the service value proposition from the customer's perspective.

Click to expand...

I drive close to 25,000 miles a year and bought the 4 + 4 plan just so I'd actually get 4 years out of it (I'd need two inspections a year based on mileage). With this announcement, I wonder if I could just take it in once a year, regardless of mileage, and actually get 8 years out of the plan?

Great service improvement. This brought two obvious questions to mind:
2. Replacing batteries is awesome. The range of batteries decrease over time. How will you prevent people from "intentionally" bricking their car by "accidentally" failing to charge it just to get a new battery with more range?

Click to expand...

They aren't going to replace it with a new battery. "The battery will be replaced at no cost by a factory reconditioned unit with an energy capacity equal to or better than the original pack before the failure occurred."

I drive close to 25,000 miles a year and bought the 4 + 4 plan just so I'd actually get 4 years out of it (I'd need two inspections a year based on mileage). With this announcement, I wonder if I could just take it in once a year, regardless of mileage, and actually get 8 years out of the plan?

Click to expand...

Now that I think about this some more, this is going to be confusing for people who have made the purchase already.

Somehow I think that if you want service, it's going to cost you $600 per visit. But, it's not mandatory now. If you want service every year or 12500 miles, whichever comes first, it's probably more economical to buy the prepaid plans. If you've paid for 4+4 because you drive much greater than 12500 per year, it may be more economical to take it in yearly at $600 a visit instead of every 12500. Alternately, maybe they would honor your purchase so you could go yearly for 8 years now.

I drive 6000-7500 each year, so it may benefit me to take it in every 12500 at $600 per visit. This would save me $700 over 4 years.

As I understand it, the 4 year service contract will cover all service that is needed for 4 years. A visit for a 'check-up' retails for $600 and is recommended at 12500 miles. If you were to just go visit to visit, paying $600, would you be covered for any service that may be needed in the interim? It seems like a plus for the pre-paid is that all service would be covered for the 4 years, not just 4 annual visits. I don't put very many miles on my cars, either... so I'm debating whether or not the prepaid would be of value. If the prepais covered ALL needed service, and if you don't sign up for a contract you would be on the line for ANY service work that might need to be done, it might make the service plan make more sense.

I drive close to 25,000 miles a year and bought the 4 + 4 plan just so I'd actually get 4 years out of it (I'd need two inspections a year based on mileage). With this announcement, I wonder if I could just take it in once a year, regardless of mileage, and actually get 8 years out of the plan?

Click to expand...

No, you would not get 8 years out of it because you'd hit the mileage limitation long before the # of years limitation. I also drive over 20,000 miles a year so I also bought the 4 + 4 plan because I knew that 100,000 miles would be here before I know it!

So, in the end, we'll still get 100,000 miles of coverage out of the plan but you and I are likely to hit that number much sooner than a typical driver. It's nice to not be REQUIRED to take it in every 12,500 miles (since that is going to happen within 6-7 months). Personally, I now plan on taking advantage of 1 service checkup every year (regardless of mileage) just to give them a chance to look over the car, throw on some wiper blades, and make any needed tweaks.

Great service improvement. This brought two obvious questions to mind:

1. Are software updates to the Model S tied to having a service agreements?
2. Replacing batteries is awesome. The range of batteries decrease over time. How will you prevent people from "intentionally" bricking their car by "accidentally" failing to charge it just to get a new battery with more range?

Click to expand...

Not only what others have stated, but remember tesla has full access to the car's logs.

I drive close to 25,000 miles a year and bought the 4 + 4 plan just so I'd actually get 4 years out of it (I'd need two inspections a year based on mileage). With this announcement, I wonder if I could just take it in once a year, regardless of mileage, and actually get 8 years out of the plan?

Click to expand...

I'm with you on this one... I'm guessing (and hoping) Tesla will change the wording on the agreement so that the plan covers 4 (or 8) visits, and you are no longer bound by the mileage/time requirement to bring it in. This will mean you can stretch out the service intervals to however long you want...

Agreed. I (very reluctantly - service costs weren't announced until after I locked in to buy my car) just bought the 8-service pack a couple of days ago because I thought it was required for warranty (well, I knew that wasn't legal, but didn't want to be a test case) and I thought last week's "P85 Loaner Cars" comment was the entirety of the service announcement.

I don't expect them to give me my money back; but they should do something so people like me don't stop buying anything from Tesla for fear it will be better next week. I think it would be an easy and obvious solution for them to say "hey, you just bought 8 service coupons; use them whenever you want". If it's not required for warranty, then it shouldn't matter when I bring it in.

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